Facebook co-founder Saverin renounces US citizenship for Singapore's?

Facebook Inc c o-founder Eduardo Saverin has renounced his US citizenship, according to an Internal Revenue Service report, days before the company's initial public offering.

The news, first published by Bloomberg on Friday, was based on an IRS notice late in April that named people "who have chosen to expatriate."

Facebook plans to raise as much as US$10.6 billion in an IPO that is expected to value the company at as much as US$96 billion.

The offering could leave Saverin, who once owned 5 per cent of the company, with a hefty capital-gains tax bill.

Saverin has sold enough of his Facebook stake that he does not appear in IPO filing documents that list shareholders who own 5 percent or more of the company, though his holdings are still believed to be substantial.

"Eduardo recently found it more practical to become a resident of Singapore since he plans to live there for an indefinite period of time," Saverin's spokesman told the US paper.

His decision to leave US is independent of the upcoming IPO and the potential tax liability, the spokesman said.

According to a report from The Los Angeles Times, tax experts say it is a "shrewd tax move" that will save him billions.

Which means his stake could amount to about $4 billion after the IPO, the report said.

To put it in perspective, Mark Zuckerberg, Facebook's founder, stands to receive a tax bill of more than US$1 billion when the social networking website makes its IPO.

ISLAND NATION

Saverin now lives in Singapore, an Asian city-state that has no capital-gains tax. There is a minimum 15 per cent rate for long-term capital gains in the United States for people in higher-income brackets.

Saverin might pay as much as US$150 million in exit taxes but it will be less than the taxes he would owe if he stay as a US citizen.

Saverin, who was born in Brazil, was educated in the United States at Harvard, where he co-founded Facebook with Mark Zuckerberg and others.

The Facebook co-founder stands at No. 634 on the Forbes list of billionaires with an estimated wealth of US$2 billion.

The 30-year-old Brazilian has spent the last four years living in Singapore. In 1992, he moved to the United States and became a US citizen in 1998.

The question of American citizenship became a bit of a talking point this week as former Republican Presidential candidate Michele Bachmann revealed she had become a dual US.-Swiss citizen, then sought to return her new Swiss passport.

Renouncing citizenship is a complicated and lengthy affair involving a signed oath and an appearance before a U.S. diplomatic official, according to the US State Department's website.

Giving up citizenship is an irrevocable act, according to the State Department.

According to the Internal Revenue Service report, those who gave up citizenship last quarter included Philip Radziwill, nephew of Jackie Onassis, the wife of assassinated former President John F. Kennedy.

The report added that Saverin is at least the second billionaire to give up his US passport in the last 20 years.